News In Focus
Scotland bucks house price fall trend
A report from the Nationwide Building Society has shown the fall in property prices in Scotland is around half that of the UK.
The Nationwide's figures showed the UK’s annual house values falling by an average of 15.9% in 2008. However, in Scotland, the decrease was 8.1%. UK prices fell by 2.5% in December, with the average house costing £153,048 (£29,000 less than a year ago), but in Scotland prices were level over the final quarter of 2008, recording a nominal rise of 0.1%.
Fionnuala Earley, Nationwide's chief economist, said Scotland remained the best performing part of the UK and the most optimistic for future house price movements. She attributed the stability of the market in Scotland partly to the size of the Scottish public sector, which employs more people per head of population than in other parts of the UK.
The report stated: "While current, relatively positive expectations are not a guarantee that prices will follow the same path, they do signal a greater degree of confidence in the Scottish market than in other parts of the UK.
"To the extent that we know the importance of confidence in housing market performance, this bodes well for Scotland."
Of the three main cities in Scotland, Aberdeen saw the largest annual fall in house prices at 11%, followed by Glasgow at 10%. Prices in Edinburgh dropped by 6%, while Renfrewshire and Inverclyde suffered the biggest decrease of 15% over the year.
Ms Earley added that while Scotland had performed very steadily over the cycle and affordability had been much better than in other parts of the UK, "It is going to be affected by the economy going into recession, the UK economy going into recession, and we will expect to see further falls in prices in Scotland."